Time to Learn a Foreign Language

Source: IMF, MSCI and Todd Asset Management

Economic growth has been a reliable determinant of relative index performance. Over the past 25 years, accelerating international GDP growth relative to the US has been accompanied by international stocks outperforming their US counterparts, and visa-versa.

Evidence of globally synchronized growth is starting to emerge and IMF expectations are for international growth to reaccelerate for the first time since 2008.

Following roughly 9 years of underperformance we think a secular resurgence of international growth and stock performance is probably beginning.